Seplat Energy Plc · LSE:SEPL
Seplat Energy — Seplat Petroleum Development Company — Bank of America 2020 Emerging Markets Debt & Equity Conference
18 slides from Seplat Energy's conference presentation, Jun 2, 2020
Slide 1: Resilience and Strength
Seplat Petroleum Development Company Plc Bank of America 2020 Emerging Markets Debt & Equity Conference Resilience and Strength 2 JUNE 2020 1 2019 FULL YEAR RESULTS
Slide 2: BAML
BAML Brian Marcus Head of Corporate Finance 2 2019 FULL YEAR RESULTS Seplat Petroleum Development Company Plc | www. seplatpetroleum.com
Slide 3: Nigeria's Leading Independent Oil & Gas Producer
NIGERIA’S LEADING INDEPENDENT OIL & GAS PRODUCER SEPLAT DELIVERED SIGNIFICANT STRATEGIC, OPERATIONAL AND FINANCIAL ACHIEVEMENTS IN Q1 2020 KEY FIGURES ACHIEVED IN Q1 2020 • 48,491 boepd total Working interest • Liquids 33,388 bopd production • Gas 88 MMscfd VOLUMES Avg. daily 48,491 boepd • Revenue
Slide 4: A Diversified and Resilient Platform
A DIVERSIFIED AND RESILIENT PLATFORM SEPLAT IS DIVERSIFYING AND RERISKING ITS BUSINESS TO ACHIEVE SUSTAINABLE COMPETITIVE ADVANTAGE ASSURING INCREASING GAS PRUDENT CAPITAL BUSINESS OIL REVENUES EXPORT ROUTES DIVERSIFICATION ALLOCATION RESILIENCE • Operate mature, • Imminent Amukpe- • Increasing • Fl
Slide 5: Q1 2020 Financial Highlights
Q1 2020 FINANCIAL HIGHLIGHTS SOLID PERFORMANCE AGAINST CHALLENGING CONDITIONS Loss after IAS 36 impairment Cash generation NPDC receivables $107 million $65 million $207 million (before deferred tax) (Cash flow from operations) 426% 19% 7% Q1 2019: $33 million Q1 2019: $79 million 12M 2019: $222 mil
Slide 6: Financial Results
FINANCIAL RESULTS A PROFITABLE BUSINESS WITH STRONG CASH GENERATION AND A ROBUST BALANCE SHEET $ million 3M 2020 3M 2019 Change Gross oil Sales 107.4 117.8 (8.8%) • Revenues reflect lower realised oil prices Gas sales 23.1 41.8 (44.7%) Total revenue 130.5 159.5 (18.2%) • Eland oil and gas was acquir
Slide 7: Cash Reconciliation
CASH RECONCILIATION STRONG FREE CASH FLOW AND DILIGENT MANAGEMENT OF GROUP LIQUIDITY $ million 600 Hedging strategy aimed at providing cash flow assurance Q1 –Q3 2020 hedging: 1.5 MMbbls/quarter 500 at US$45/bbl 1 10 400 65 26 326 329 46 1 300 200 100 0 Cash at 31/12/19 Cash from Interest received P
Slide 8: Prudent Financial Management
PRUDENT FINANCIAL MANAGEMENT SEPLAT’S FLEXIBILITY TO SCALE INVESTMENT UP OR DOWN HELPED IT NAVIGATE PREVIOUS CHALLENGES INCREASING GAS VOLUMES DIVERSIFY BUSINESS SUCCESSFUL CASH MANAGEMENT STRATEGY 49,867 $900 Gross debt ($m) Cash ($m) 50,000 46,498 $900 43,372 $259m OML $789 Oil Gas $800 53 acquisi
Slide 9: Robust Capital Structure
ROBUST CAPITAL STRUCTURE SEPLAT IS IN A POSITION OF FINANCIAL STRENGTH AND WELL-FUNDED TO CAPITALISE ON OPPORTUNITIES • Capital structure amended following acquisition of Eland Oil & Gas PLC NET DEBT POSITION REFLECTS CASH ACQUISITION OF ELAND • Eland RBL now part of structure • $300m Seplat RCF ups
Slide 10: Landmark Acquisition of Eland Oil & Gas Plc
LANDMARK ACQUISITION OF ELAND OIL & GAS PLC DIVERSIFIES PRODUCTION AND EXPORT ROUTES, ADDS SIGNIFICANT EXPLORATION EXPERTISE AND POTENTIAL OML 40 RESERVES PRODUCTION EXPORT ROUTES • Adds 36 MMbbls • 8,963 kbopd • Adds production not WI 2P reserves achieved in 2019 dependent on • High-quality • Diver
Slide 11: Westport Loan Repayments Underpin Future Cash Flow
WESTPORT LOAN REPAYMENTS UNDERPIN FUTURE CASH FLOW SEPLAT HAS ACQUIRED THE RIGHT TO BE REPAID MORE THAN $414M BETWEEN 2021-24 When Seplat paid EV $457m for Eland it acquired: • Eland’s share of OML40 Westport repays $414M • The right to be repaid $414m by Westport to Seplat via Eland • The right to
Slide 12: Q1 2020 Working Interest Production & FY 2020 Guidance
Q1 2020 WORKING INTEREST PRODUCTION & FY 2020 GUIDANCE A STRONG PORTFOLIO OF PRODUCTIVE FIELDS FY 2020 guidance range boepd 60,000 47 kboepd - 57 kboepd including OML40 and Ubima • Average working interest production: Oil production 48,491 boepd (Q1 2019: 46,581 boepd) Gas production 49,867 • Eland
Slide 13: Value Creation from Future Export Routes
VALUE CREATION FROM FUTURE EXPORT ROUTES ADDITIONAL ROUTES WILL DIVERSIFY AND DERISK EXPORTS, ASSURING GREATER REVENUE FLOW AMUKPE-ESCRAVOS • Scheduled to open H1 2020 • Alternative to Trans Forcados pipeline • Mostly underground pipe, protected from vandalism • Assures more secure export route for
Slide 14: The Long Term Vision for Seplat's Gas Business
THE LONG TERM VISION FOR SEPLAT’S GAS BUSINESS ESTABLISHING AND GROWING CORE GAS HUBS WITH INTERCONNECTIVITY TO NIGERIA’S LARGEST DEMAND CENTRES OBEN HUB • Deliveries to the 459MW Azura-Edo IPP now at contracted level of 116 MMscfd under take-or-pay OMLs 4, 38, 41 terms • Aiming to take contracted g
Slide 15: Gas Delivers Multiple Cash Flow Benefits
GAS DELIVERS MULTIPLE CASH FLOW BENEFITS LONG-TERM VISIBILITY OF REVENUES WITH HIGHER DROP-THROUGH OF CASH ADVANTAGES OF GAS FOR GROUP CASH FLOWS VOLUMES ALREADY CONTRACTED OUT TO 2035 ANOH comes 1. Gas pricing de-couples revenue from oil price volatility 900onstream 800 2. 10-15 year offtake agreem
Slide 16: Impact of COVID-19 and Oil Market Stresses
IMPACT OF COVID-19 AND OIL MARKET STRESSES MITIGATING ACTIONS ON BOTH FRONTS IMPACT OF OIL MARKET STRESS SEPLAT’S MITIGATION STRATEGY • Twin shocks of falling demand and supply war • Hedged 1.5MMbbl per quarter for Q1 to Q3 @ $45 • Demand hit by Covid-19 • Capex cut to $120m ($50m already invested)
Slide 17: Outlook
OUTLOOK SHORT TERM FOCUS ON CASH PRESERVATION, LONGER TERM SIGNIFICANT GROWTH PROSPECTS GUIDANCE FOR 2020 SHORT-TERM VALUE DRIVERS (0-2 YEARS) 1. Increase in production from Eland’s OML40, with exports not dependent on Seplat’s existing export routes 2. Greater/more reliable output from OMLs 4,38, a
Slide 18: Head Office / London Office
Head Office Seplat Petroleum Development Company Plc Address: 16A, Temple Road, Ikoyi, Lagos, Nigeria. Phone: +234 (0)1 277 0400 Email: info@seplatpetroleum.com ir@seplatpetroleum.com Web: www.seplatpetroleum.com London Office Seplat Petroleum Development Company Plc Address: 4th Floor, 50 Pall Mall